Change 1 Article Choose an article Title and introductory text 1 Overview of contents of this Act 2 Abbreviations and general index in Schedule 1 3 Structure of employment income Parts 4 “Employment” for the purposes of the employment income Parts 5 Application to offices and office-holders 6 Nature of charge to tax on employment income 7 Meaning of “employment income”, “general earnings” and “specific employment income” 8 Meaning of “exempt income” 9 Amount of employment income charged to tax 10 Meaning of “taxable earnings” and “taxable specific income” 11 Calculation of “net taxable earnings” 12 Calculation of “net taxable specific income” 13 Person liable for tax 14 Taxable earnings under this Chapter: introduction 15 Earnings for year when employee UK resident 16 Meaning of earnings “for” a tax year 17 Treatment of earnings for year in which employment not held 18 Receipt of money earnings 19 Receipt of non-money earnings 20 Taxable earnings under this Chapter: introduction 21 Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings 22 Chargeable overseas earnings for year when remittance basis applied and employee outside section 26 23 Calculation of “chargeable overseas earnings” 24 Limit on chargeable overseas earnings where duties of associated employment performed in UK 24A Restrictions on remittance basis 24B Definitions of “C” and “I” for the purposes of section 24A(14) 25 UK-based earnings for year when employee resident, but not ordinarily resident, in UK 26 Foreign earnings for year when remittance basis applied and employee met section 26A requirement 26A Section 26: requirement for 3-year period of non-residence 27 UK-based earnings for year when employee not resident in UK 28 Meaning of “general earnings from overseas Crown employment subject to UK tax” 29 Meaning of earnings “for” a tax year 30 Treatment of earnings for year in which employment not held 38 Earnings for period of absence from employment 38A Earnings relating to duties not performed 39 Duties in UK merely incidental to duties outside UK 40 Duties on board vessel or aircraft 41 Employment in UK sector of continental shelf 41ZA Basis of apportionment 41A Taxable specific income from employment-related securities: effect of remittance basis 41B Section 41A: the relevant period 41C Section 41A: foreign securities income 41D Limit on foreign securities income where duties of associated employment performed in UK 41E Foreign securities income: just and reasonable apportionment 41F Taxable specific income: internationally mobile employees etc 41G Section 41F: the relevant period 41H Section 41F: chargeable and unchargeable foreign securities income 41I Limit on “chargeable foreign securities income” where duties of associated employment performed in UK 41J Location of employment duties 41K Securities income from overseas Crown employment 41L Chargeable and unchargeable foreign securities income: just and reasonable apportionment 41M Foreign employment election for qualifying new residents 41N Key definitions 41P Claim for relief for qualifying new residents 41Q Amount of relief available 41R Limit on relief 41S Effect of claim on relief for contributions to registered pension schemes 41T Foreign employment relief ignored for purposes of determining adjusted net income 41U Qualifying foreign general earnings 41V Qualifying foreign third party income 41W Qualifying foreign securities income 41X Meaning of “overseas Crown employment subject to UK tax” 41Y Location of employment duties 41Z Artificial arrangements to be disregarded 41Z1 Limit on qualifying foreign employment income from associated employments 43 Appeal against Commissioners' decision on domicile or ordinary residence 44 Treatment of workers supplied by agencies 45 Arrangements with agencies 46 Cases involving unincorporated bodies etc. 46A Anti-avoidance 47 Interpretation of this Chapter 48 Scope of this Chapter 49 Engagements to which this Chapter applies 50 Worker treated as receiving earnings from employment 51 Conditions of liability where intermediary is a company 52 Conditions of liability where intermediary is a partnership 53 Conditions of liability where intermediary is an individual 54 Calculation of deemed employment payment 55 Application of rules relating to earnings from employment 56 Application of Income Tax Acts in relation to deemed employment 57 Earlier date of deemed employment payment in certain cases 58 Relief in case of distributions by intermediary 59 Provisions applicable to multiple intermediaries 60 Meaning of “associate” 60A When a company qualifies as small for a tax year 60B When a company qualifies as small for a tax year: joint ventures 60C When a company qualifies as small for a tax year: subsidiaries 60D When a relevant undertaking qualifies as small for a tax year 60E When other undertakings qualify as small for a tax year 60F When other persons qualify as small for a tax year 60G Sections 60A to 60F: connected persons 60H Duty on client to state whether it qualifies as small for a tax year 60I When a person has a UK connection for a tax year 61 Interpretation 61A Scope of this Chapter 61B Meaning of “managed service company” 61C Section 61B: supplementary 61D Worker treated as receiving earnings from employment 61E Calculation of deemed employment payment 61F Sections 61D and 61E: application of rules relating to earnings from employment 61G Application of Income Tax Acts in relation to deemed employment 61H Relief in case of distributions by managed service company 61I Meaning of “associate” 61J Interpretation of Chapter 61K Scope of this Chapter 61L Meaning of “public authority” 61M Engagements to which Chapter applies 61N Worker treated as receiving earnings from employment 61NA Meaning of status determination statement 61O Conditions where intermediary is a company 61P Conditions where intermediary is a partnership 61Q Calculation of deemed direct payment 61R Application of Income Tax Acts in relation to deemed employment 61S Deductions from chain payments 61T Client-led status disagreement process 61TA Duty for client to withdraw status determination statement if it ceases to be medium or large 61U Information to be provided by worker or intermediary and consequences of failure 61V Consequences of providing fraudulent information 61W Prevention of double charge to tax and allowance of certain deductions 61WA Anti-avoidance 61X Interpretation 61Y Umbrella companies: joint and several liability 61Z Relevant parties 61Z1 Purported umbrella companies 61Z2 Disclosures to liable persons 62 Earnings 63 The benefits code 64 Relationship between earnings and benefits code 65 Dispensations relating to benefits within provisions not applicable to lower-paid employment 66 Meaning of “employment” and related expressions 67 Meaning of “director” and “full-time working director” 68 Meaning of “material interest” in a company 69 Extended meaning of “control” 69A Optional remuneration arrangements 69B Optional remuneration arrangements: supplementary 70 Sums in respect of expenses 71 Meaning of paid or put at disposal by reason of the employment 72 Sums in respect of expenses treated as earnings 73 Cash vouchers to which this Chapter applies 74 Provision for, or receipt by, member of employee’s family 75 Meaning of “cash voucher” 76 Sickness benefits-related voucher 77 Apportionment of cost of provision of voucher 78 Voucher made available to public generally 79 Voucher issued under approved scheme 80 Vouchers where payment of sums exempt from tax 81 Benefit of cash voucher treated as earnings 82 Non-cash vouchers to which this Chapter applies 83 Provision for, or receipt by, member of employee’s family 84 Meaning of “non-cash voucher” 85 Non-cash voucher made available to public generally 86 Transport vouchers under pre-26th March 1982 arrangements 87 Benefit of non-cash voucher treated as earnings 87A Benefit of non-cash voucher treated as earnings: optional remuneration arrangements 88 Year in which earnings treated as received 89 Reduction for meal vouchers 90 Credit-tokens to which this Chapter applies 91 Provision for, or use by, member of employee’s family 92 Meaning of “credit-token” 93 Credit-token made available to public generally 94 Benefit of credit-token treated as earnings 94A Benefit of credit-token treated as earnings: optional remuneration arrangements 95 Disregard for money, goods or services obtained 96 Dispensations relating to vouchers or credit-tokens 96A Power to exempt use of non-cash vouchers or credit-tokens to obtain exempt benefits 97 Living accommodation to which this Chapter applies 98 Accommodation provided by local authority 99 Accommodation provided for performance of duties 100 Accommodation provided as result of security threat 100A Homes outside UK owned through company etc 100B Section 100A(1): exceptions 101 Chevening House 102 Benefit of living accommodation treated as earnings 103 Method of calculating cash equivalent 103A Accommodation provided pursuant to optional remuneration arrangements: relevant amount 104 General rule for calculating cost of providing accommodation 105 Cash equivalent: cost of accommodation not over £75,000 105A Lease premiums 105B Lease premiums in the case of leases with break clauses 106 Cash equivalent: cost of accommodation over £75,000 107 Special rule for calculating cost of providing accommodation 108 Cash equivalent: accommodation provided for more than one employee 109 Priority of this Chapter over Chapter 1 of this Part 110 Meaning of “annual value” 111 Disputes as to annual value 112 Meaning of “person involved in providing the accommodation” 113 Meaning of “the property” 114 Cars, vans and related benefits 115 Meaning of “car” and “van” 116 Meaning of when car or van is available to employee 117 Meaning of car or van made available by reason of employment 118 Availability for private use 119 Where alternative to benefit of low emission car or van offered 120 Benefit of car treated as earnings 120A Benefit of car treated as earnings: optional remuneration arrangements 121 Method of calculating the cash equivalent of the benefit of a car 121A Optional remuneration arrangements: method of calculating relevant amount 121B Meaning of “modified cash equivalent” 122 The price of the car 123 The list price of a car 124 The notional price of a car with no list price 124A Automatic car for a disabled employee 125 Meaning of “accessory” and related terms 125A Security features not to be regarded as accessories 126 Amounts taken into account in respect of accessories 127 The list price of an accessory 128 Accessory: published price of the car manufacturer etc. 129 Accessory: published price of the accessory manufacturer etc. 130 The notional price of an accessory 131 Replacement accessories 132 Capital contributions by employee 132A Capital contributions by employee: optional remuneration arrangements 133 How to determine the “appropriate percentage” 134 Meaning of car with or without a CO2 emissions figure 135 Car with a CO2 emissions figure: pre-October 1999 registration 136 Car with a CO2 emissions figure: registration from 1st October 1999 to IP completion day 136A Car with a CO2 emissions figure: registration on or after IP completion day 137 Car with a CO2 emissions figure: bi-fuel cars : registration from 1st January 2000 to IP completion day 137A Car with a CO2 emissions figure: bi-fuel cars registered on or after IP completion day 138 Car with a CO2 emissions figure: automatic car for a disabled employee 138A Certain cars with a CO2 emissions figure and an electric range figure 139 Cars with a CO2 emissions figure: the appropriate percentage 140 Car without a CO2 emissions figure: the appropriate percentage 141 Diesel cars: the appropriate percentage 142 Car first registered before 1st January 1998: the appropriate percentage 143 Deduction for periods when car unavailable 144 Deduction for payments for private use 145 Modification of provisions where car temporarily replaced 146 Cars that run on road fuel gas 147 Classic cars: 15 years of age or more 147A Classic cars: optional remuneration arrangements 148 Reduction of cash equivalent where car is shared 149 Benefit of car fuel treated as earnings 149A Benefit of car fuel treated as earnings: optional remuneration arrangements 150 Car fuel: calculating the cash equivalent 151 Car fuel: nil cash equivalent 152 Car fuel: proportionate reduction of cash equivalent 153 Car fuel: reduction of cash equivalent 154 Benefit of van treated as earnings 154A Benefit of van treated as earnings: optional remuneration arrangements 155 Cash equivalent of the benefit of a van 156 Meaning of “shared van” 157 Reduction of cash equivalent where van is shared 158 Reduction for payments for private use 158A Van provided pursuant to optional remuneration arrangements: private use 159 Modification of provisions where van temporarily replaced 160 Benefit of van fuel treated as earnings 160A Benefit of van fuel treated as earnings: optional remuneration arrangements 161 Van fuel: the cash equivalent 162 Van fuel: nil cash equivalent 163 Van fuel: proportionate reduction of cash equivalent 164 Van fuel: reduction of cash equivalent 167 Pooled cars 168 Pooled vans 169 Car available to more than one member of family or household employed by same employer 169A Van available to more than one member of family or household employed by same employer 170 Orders etc. relating to this Chapter 171 Minor definitions: general 172 Minor definitions: equipment to enable a disabled person to use a car 173 Loans to which this Chapter applies 173A Alternative finance arrangements 174 Employment-related loans 175 Benefit of taxable cheap loan treated as earnings 175A Optional remuneration arrangements: “relevant amount” and “modified cash equivalent” 176 Exception for loans on ordinary commercial terms 177 Exceptions for loans at fixed rate of interest 178 Exception for loans where interest qualifies for tax relief 179 Exception for certain advances for necessary expenses 180 Threshold for benefit of loan to be treated as earnings 181 The official rate of interest 182 Normal method of calculation: averaging 183 Alternative method of calculation 184 Interest treated as paid 185 Apportionment of cash equivalent in case of joint loan etc. 186 Replacement loans 187 Aggregation of loans by close company to director 188 Loan released or written off: amount treated as earnings 189 Exception where double charge 190 Exclusion of charge after death of employee 191 Claim for relief to take account of event after assessment 201 Employment-related benefits 202 Excluded benefits 203 Cash equivalent of benefit treated as earnings 203A Employment-related benefit provided under optional remuneration arrangements 204 Cost of the benefit: basic rule 205 Cost of the benefit: asset made available without transfer 205A Deduction for periods when asset unavailable for private use 205B Reduction of cost of taxable benefit where asset is shared 206 Cost of the benefit: transfer of used or depreciated asset 207 Meaning of “annual rental value” 208 Meaning of “market value” 209 Meaning of “persons providing benefit” 210 Power to exempt minor benefits 211 Special rules for scholarships: introduction 212 Scholarships provided under arrangements entered into by employer or connected person 213 Exception for certain scholarships under trusts or schemes 214 Scholarships: cost of the benefit 215 Limitation of exemption for scholarship income in section 776(1) of ITTOIA 2005 221 Payments where employee absent because of sickness or disability 222 Payments by employer on account of tax where deduction not possible 223 Payments on account of director’s tax other than by the director 224 Payments to non-approved personal pension arrangements 225 Payments for restrictive undertakings 226 Valuable consideration given for restrictive undertakings 226A Amount treated as earnings 226C Only one payment deemed to be made under associated agreements 226E Sporting testimonial payments 227 Scope of Part 4 228 Effect of exemptions on liability under provisions outside Part 2 228A General exclusion from exemptions: optional remuneration arrangements 229 Mileage allowance payments 230 The approved amount for mileage allowance payments 231 Mileage allowance relief 232 Giving effect to mileage allowance relief 233 Passenger payments 234 The approved amount for passenger payments 235 Vehicles to which this Chapter applies 235A Journeys made by members of local authorities etc 236 Interpretation of this Chapter 237 Parking provision and expenses 237A Vehicle-battery charging 238 Modest private use of heavy goods vehicles 239 Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles 240 Incidental overnight expenses and benefits 241 Incidental overnight expenses and benefits: overall exemption limit 241A Travel by unpaid directors of not-for-profit companies 241B Travel where directorship held as part of trade or profession 242 Works transport services 243 Support for public bus services 244 Cycles and cyclist’s safety equipment 245 Travelling and subsistence during public transport strikes 246 Transport between work and home for disabled employees: general 247 Provision of cars for disabled employees 248 Transport home: late night working and failure of car-sharing arrangements 248A Emergency vehicles 249 Interpretation of this Chapter 250 Exemption of work-related training provision 251 Meaning of “work-related training” 252 Exception for non-deductible travel expenses 253 Exception where provision for excluded purposes 254 Exception where unrelated assets are provided 254A Apprenticeship bursaries paid to persons leaving local authority care 255 Exemption for contributions to individual learning account training 256 Meaning of “individual learning account training” 257 Exception for non-deductible travel expenses 258 Exception where provision for excluded purposes 259 Exception where unrelated assets are provided 260 Exception where training not generally available to staff 261 Exemption of recreational benefits 262 Benefits not exempted by section 261 263 Power to alter benefits to which section 261 applies 264 Annual parties and functions 265 Third party entertainment 266 Exemption of non-cash vouchers for exempt benefits 267 Exemption of credit-tokens used for exempt benefits 268 Exemption of vouchers and tokens for incidental overnight expenses 269 Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle 270 Exemption for small gifts of vouchers and tokens from third parties 270A Limited exemption for qualifying childcare vouchers 270AA Meaning of “eligible employee” 270B Meaning of “relevant earnings amount” and “required time” 271 Limited exemption of removal benefits and expenses: general 272 Removal benefits and expenses to which section 271 applies 273 Conditions applicable to change of residence 274 Meaning of “the limitation day” 275 Meaning of “the employment change” 276 Meaning of “residence”, “former residence” and “new residence” etc. 277 Acquisition benefits and expenses 278 Abortive acquisition benefits and expenses 279 Disposal benefits and expenses 280 Transporting belongings 281 Travelling and subsistence 282 Exclusion from section 281 of benefits and expenses where deduction allowed 283 Exclusion from section 281 of taxable car and van facilities 284 Bridging loan expenses 285 Replacement of domestic goods 286 Power to amend sections 277 to 285 287 Limit on exemption 288 Limited exemption of certain bridging loans connected with employment moves 289 Relief for certain bridging loans not qualifying for exemption under section 288 289A Exemption for paid or reimbursed expenses 289B Approval to pay or reimburse expenses at a flat rate 289C Revocation of approvals 289D Exemption for other benefits 289E Anti-avoidance 290 Accommodation benefits of ministers of religion 290A Accommodation outgoings of lower-paid ministers of religion 290B Allowances paid to lower-paid ministers of religion in respect of accommodation outgoings 290C Provisions of benefits code not applicable to lower-paid ministers of religion 290D Meaning of “lower-paid employment as a minister of religion” 290E Calculation of earnings rate for a tax year 290F Extra amounts to be added in connection with a car 290G Related employments 291 Termination payments to MPs and others ceasing to hold office 292 Accommodation expenses of MPs 293 Overnight expenses of other elected representatives 293A UK travel and subsistence expenses of MPs 293B UK travel expenses of other elected representatives 294 European travel expenses of MPs and other representatives 295 Transport and subsistence for Government ministers etc. 295A Travel expenses of members of local authorities etc 296 Armed forces' leave travel facilities 297 Armed forces' food, drink and mess allowances 297A Armed forces: the Operational Allowance 297B Armed forces: the Council Tax Relief 297C Armed forces: Continuity of Education Allowance 297D Armed forces: accommodation allowances 298 Reserve and auxiliary forces' training allowances 299 Crown employees' foreign service allowances 299A Voluntary office-holders: compensation for lost employment income 299B Voluntary office-holders: payments in respect of expenses 300 Consuls 301 Official agents 302 Consular employees 303 Visiting forces etc 304 Experts seconded to European Commission 304A Experts seconded to other European Union bodies 305 Offshore oil and gas workers: mainland transfers 306 Miners etc: coal and allowances in lieu of coal 306A Carers: board and lodging 306B Limited exemption for sporting testimonial payments 307 Death or retirement benefit provision 308 Exemption of contributions to registered pension scheme 308A Exemption of contributions to overseas pension scheme 308B Independent advice in respect of conversions and transfers of pension scheme benefits 308C Provision of pensions advice: limited exemption 309 Limited exemptions for statutory redundancy payments 310 Counselling and other outplacement services 311 Retraining courses 312 Recovery of tax 312A Limited exemption for qualifying bonus payments 312B “Qualifying bonus payments” 312C Section 312B: the participation and equality requirements 312D Section 312B: the trading requirement 312E Section 312B: the indirect employee-ownership requirement 312F Section 312B: the office-holder requirement 312G “Service company” 312H Excluded payments 312I Interpretation of Chapter 10A 313 Repairs and alterations to living accommodation 314 Council tax etc. paid for certain living accommodation 315 Limited exemption for expenses connected with certain living accommodation 316 Accommodation, supplies and services used in employment duties 316ZA Accommodation, supplies and services used in employment duties: payment or reimbursement of expenses 316A Homeworker’s additional household expenses 317 Subsidised meals 318 Childcare: exemption for employer-provided care 318A Childcare: limited exemption for other care 318AZA Meaning of “eligible employee” 318AA Meaning of “relevant earnings amount” and “required time” 318B Childcare: meaning of “care”, “child” and “parental responsibility” 318C Childcare: meaning of “qualifying child care” 318D Childcare: power to vary amounts which are the exempt amount and qualifying conditions 319 Mobile telephones 320 Limited exemption for computer equipment 320A Eye tests and special corrective appliances 320B Health-screening and medical check-ups 320C Recommended medical treatment 320D Flu vaccinations 321 Suggestion awards 322 Suggestion awards: “the permitted maximum” 323 Long service awards 323A Trivial benefits provided by employers 323B Section 323A: calculation of available exempt amount 323C Power to amend sections 323A and 323B 324 Small gifts from third parties 325 Overseas medical treatment 325A Health and employment insurance payments 326 Expenses incidental to transfer of a kind not normally met by transferor 326A Fees relating to monitoring schemes relating to vulnerable persons 326B Advice relating to proposed employee shareholder agreements 327 Deductions from earnings: general 328 The income from which deductions may be made 329 Deductions from earnings not to exceed earnings 330 Prevention of double deductions 331 Order for making deductions 332 Meaning of “the deductibility provisions” 333 Scope of this Chapter: expenses paid by the employee 334 Effect of reimbursement etc. 335 Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance” 336 Deductions for expenses: the general rule 337 Travel in performance of duties 338 Travel for necessary attendance 339 Meaning of “workplace” and “permanent workplace” 339A Travel for necessary attendance: employment intermediaries 340 Travel between group employments 340A Travel between linked employments 341 Travel at start or finish of overseas employment 342 Travel between employments where duties performed abroad 343 Deduction for professional membership fees 344 Deduction for annual subscriptions 345 Decisions of an officer of Revenue and Customs under section 344 346 Deduction for employee liabilities and expenses 347 Payments made after leaving the employment 348 Liabilities related to the employment 349 Meaning of “qualifying insurance contract” 350 Connected contracts 351 Expenses of ministers of religion 352 Limited deduction for agency fees paid by entertainers 353 Deductions from earnings charged on remittance 354 Disallowance of expenses relating to earnings taxed on different basis or untaxed 355 Deductions for corresponding payments by qualifying new resident employees with foreign employers 356 Disallowance of business entertainment and gifts expenses 357 Business entertainment and gifts: exception where employer’s expenses disallowed 358 Business entertainment and gifts: other exceptions 359 Disallowance of travel expenses: mileage allowances and reliefs 360 Disallowance of certain accommodation expenses of MPs and other representatives 360A Social security contributions 360B Additional household expenses 361 Scope of this Chapter: cost of benefits deductible as if paid by employee 362 Deductions where non-cash voucher provided 363 Deductions where credit-token provided 364 Deductions where living accommodation provided 365 Deductions where certain employment-related benefits provided 366 Scope of this Chapter: amounts fixed by Treasury 367 Fixed sum deductions for repairing and maintaining work equipment 368 Fixed sum deductions from earnings payable out of public revenue 369 Scope of this Chapter: earnings representing benefits or reimbursed expenses 370 Travel costs and expenses where duties performed abroad: employee’s travel 371 Travel costs and expenses where duties performed abroad: visiting spouse’s , civil partner's or child’s travel 372 Where seafarers' duties are performed 373 Non-resident or qualifying new resident employee’s travel costs and expenses where duties performed in UK 374 Non-resident or qualifying new resident employee’s spouse’s , civil partner's or child’s travel costs and expenses where duties performed in UK 375 Meaning of “qualifying arrival date” 376 Foreign accommodation and subsistence costs and expenses (overseas employments) 377 Costs and expenses in respect of personal security assets and services 378 Deduction from seafarers' earnings: eligibility 379 Calculating the deduction 380 Limit on deduction where UK duties etc. make amount unreasonable 381 Taking account of other deductions 382 Duties on board ship 383 Place of performance of incidental duties 384 Meaning of employment “as a seafarer” 385 Meaning of “ship” 393 Application of this Chapter 393A Employer-financed retirement benefits scheme 393B Relevant benefits 394 Charge on benefit to which this Chapter applies 394A Temporary non-residents 395 Reduction where employee has contributed 395A Benefits under old section 222 schemes not taxed by virtue of section 394 395B Exemption or reduction for foreign service 395C Meaning of “foreign service” in section 395B 396 Certain lump sums not taxed by virtue of section 394 397 Certain lump sums: calculation of amount taxed by virtue of section 394 398 Valuation of benefits 399 Employment-related loans: interest treated as paid 399A Responsible person 400 Interpretation 401 Application of this Chapter 402 Meaning of “benefit” 402A Split of payments and other benefits between sections 402B and 403 402B Termination awards not benefiting from threshold to be treated as earnings 402C The termination awards to which section 402B applies 402D “Post-employment notice pay” 402E Meaning of “trigger date” and “post-employment notice period” in section 402D 403 Charge on payment or other benefit where threshold applies 404 How the £30,000 threshold applies 404A Amounts charged to be treated as highest part of total income 404B Power to vary threshold 405 Exception for certain payments exempted when received as earnings 406 Exception for death or disability payments and benefits 407 Exception for payments and benefits under tax-exempt pension schemes 408 Exception for contributions to registered pension schemes 409 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance 410 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance: individual deceased 411 Exception for payments and benefits for forces 412 Exception for payments and benefits provided by foreign governments etc. 413 Exception in certain cases of foreign service 413A Exception for payment of certain legal costs 414 Reduction in other cases of foreign service 414A Exception for payments and benefits under section 615(3) schemes 414B Exception in certain cases of foreign service as seafarer 414C Reduction in other cases of foreign service as seafarer 415 Valuation of benefits 416 Notional interest treated as paid if amount charged for beneficial loan 417 Scope of Part 7 418 Other related provisions 419 Negative amounts treated as nil 420 Meaning of “securities” etc 421 Meaning of “market value” etc 421A Meaning of “consideration” 421B Application of Chapters 2 to 4A 421C Associated persons 421D Replacement and additional securities and changes in interests 421E Exclusions: residence etc 421F Exclusions: public offers 421G Exclusions: approved plan or scheme securities 421H Meaning of “employee-controlled” etc 421I Consideration for acquisition of employment-related securities 421J Duty to provide information 421JA Annual returns 421JB Returns to be given electronically 421JC Penalties for late returns 421JD Penalty if information not given correctly 421JE Assessment of penalties 421JF Appeals 421K Reportable events 421L Persons to whom section 421J applies 422 Application of this Chapter 423 “Restricted securities” and “restricted interest in securities” 424 Exceptions 425 No charge in respect of acquisition in certain cases 426 Charge on occurrence of chargeable event 427 Chargeable events 428 Amount of charge 428A Relief for secondary Class 1 contributions met by employee 429 Case outside charge under section 426 430 Election for outstanding restrictions to be ignored 430A Application of this Chapter where securities exchanged for further securities 431 Election for full or partial disapplication of this Chapter 431A Shares under tax advantaged plan or scheme 431B Securities acquired for purpose of avoidance 432 Definitions 435 Application of this Chapter 436 “Convertible securities” 437 Adjustment of charge 438 Charge on occurrence of chargeable event 439 Chargeable events 440 Amount of charge 441 Amount of gain realised on occurrence of chargeable event 442 Amount of consideration given for entitlement to convert 442A Relief for secondary Class 1 contributions met by employee 443 Case outside charge under section 438 444 Definitions 446A Application of this Chapter 446B Charge on acquisition 446C Amount of charge 446D Restricted securities and convertible securities 446E Charge on restricted securities 446F Adjustment of market value: conditional interests 446G Adjustment of market value: consideration for entitlement to convert 446H Adjustment of market value: charge on conversion 446I Adjustment of consideration or benefit received 446IA Disapplication of exceptions from charges 446J Definitions 446K Application of this Chapter 446L Charge on non-commercial increases 446M Securities subject to restriction on valuation date 446N Securities subject to restriction during relevant period 446NA Disapplication of exceptions from charges 446O “Relevant period” and “valuation date” 446P Definitions 446Q Application of this Chapter 446R Case outside this Chapter 446S Notional loan 446T Amount of notional loan 446U Discharge of notional loan 446UA Pre-acquisition avoidance cases 446V Chapter to be additional to other income tax charges 446W Definitions 446X Application of this Chapter 446Y Amount treated as income 446Z Definitions 447 Charge on other chargeable benefits from securities 448 Amount of charge 449 Case outside this Chapter 450 Definitions 451 Amount of charge 452 Cases outside charge under section 449 453 Charge on increase in value of shares of dependent subsidiary 454 Chargeable increases 455 Amount of charge 456 Cases outside charge under section 453 457 Charge on other chargeable benefits from shares 458 Chargeable benefits 459 Amount of charge 460 Cases outside charge under section 457 461 Related acquisitions of additional shares 462 Company reorganisations etc. 463 Disposals of shares to connected persons etc. ignored 464 Application to interests in shares 465 Duty to notify acquisitions of shares or interests in shares 466 Duty to notify chargeable events and chargeable benefits 467 Meaning of “dependent subsidiary” 468 Meaning of “employee-controlled” 469 Shares “held by outside shareholders” 470 Minor definitions 451 Application of this Chapter 452 Market value on acquisition 453 Taxable amount under Chapter 4 454 Deemed election for disapplication of Chapter 2 455 Disapplication of Chapter 3B 456 Meaning of “intellectual property” and “transfer” 457 Meaning of “research institution” 458 Meaning of “involved in research” 459 Transfer of intellectual property by controlled company 460 Definitions 471 Options to which this Chapter applies 472 Associated persons 473 Introduction to taxation of securities options 474 Cases where this Chapter does not apply 475 No charge in respect of acquisition of option 476 Charge on occurrence of chargeable event 477 Chargeable events 478 Amount of charge 479 Amount of gain realised on occurrence of chargeable event 480 Deductible amounts 481 Relief for secondary Class 1 contributions met by employee 482 Relief for special contribution met by employee 483 Application of this Chapter where option exchanged for another 484 Definitions 485 Application of this Chapter where share option exchanged for another 486 Duty to notify matters relating to share options 487 Minor definitions 488 ... Share incentive plans (SIPs) 489 Operation of tax advantages in connection with Schedule 2 SIP 490 No charge on award or acquisition of shares: general 491 No charge on award of shares as taxable benefit 492 No charge on partnership share money deducted from salary 493 No charge on acquisition of dividend shares 494 No charge on removal of restrictions applying to shares 495 No charge on increase in value of shares of dependent subsidiary 496 No charge on cash dividend retained for reinvestment 497 Limitations on charges on shares ceasing to be subject to plan 498 No charge on shares ceasing to be subject to plan in certain circumstances 499 No charge in respect of incidental expenditure 500 Operation of tax charges in connection with Schedule 2 SIP 501 Charge on capital receipts in respect of plan shares 502 Meaning of “capital receipt” in section 501 503 Charge on partnership share money paid over to employee 504 Charge on cancellation payments in respect of partnership share agreement 505 Charge on free or matching shares ceasing to be subject to plan 506 Charge on partnership shares ceasing to be subject to plan 507 Charge on disposal of beneficial interest during holding period 508 Identification of shares ceasing to be subject to plan 509 Modification of section 696 where charge on shares ceasing to be subject to plan 510 Payments by trustees to employer company on shares ceasing to be subject to plan 511 PAYE deductions to be made by trustees on shares ceasing to be subject to plan 512 Disposal of beneficial interest by participant 513 Capital receipts: payments by trustees to employer company 514 Capital receipts: PAYE deductions to be made by trustees 515 Tax advantages and charges under other Acts 516 ... SAYE option schemes 517 Share options to which this Chapter applies 518 No charge in respect of receipt of option 519 No charge in respect of exercise of option 520 No charge in respect of post-acquisition benefits 521 ... CSOP schemes 522 Share options to which this Chapter applies 523 No charge in respect of receipt of option 524 No charge in respect of receipt of option 525 No charge in respect of post-acquisition benefits 526 Charge where option granted at a discount 527 Enterprise management incentives: qualifying options 528 No charge on receipt of qualifying option 529 Scope of tax advantages: option must be exercised by the specified anniversary 530 No charge on exercise of option to acquire shares at market value 531 Limitation of charge on exercise of option to acquire shares below market value 532 Modified tax consequences following disqualifying events 533 Disqualifying events 534 Disqualifying events relating to relevant company 535 Disqualifying events relating to employee 536 Other disqualifying events 537 Alterations of share capital for purposes of section 536 538 Share conversions excluded for purposes of section 536 539 CSOP and other options relevant for purposes of section 536 540 No charge on acquisition of shares as taxable benefit 541 Effects on other income tax charges 542 Exemption: offer made to public and employees 543 Discount not covered by exemption in section 542 544 Exemption: different offers made to public and employees 545 Discount not covered by exemption in section 544 546 Meaning of being entitled “on similar terms” 547 Meaning and amount or value of “registrant discount” 548 Minor definitions 549 Application of this Chapter 550 Meaning of “employee benefit trust” 551 “Qualifying disposals” for purposes of section 550 552 Attribution of interest in company to beneficiary or associate 553 Meaning of “appropriate percentage” for purposes of section 552 554 Attribution of further interest in company 554A Application of Chapter 2 : main case 554AA Application of Chapter 2: close companies 554AB Meaning of “relevant transaction” 554AC Meaning of “excluded transaction” 554AD Section 554AA: meaning of “director” 554AE Section 554AA: meaning of “material interest” 554AF Section 554AA: supplementary 554B Relevant steps: earmarking etc of sum of money or asset 554C Relevant steps: payment of sum, transfer of asset etc 554D Relevant steps: making asset available 554E Exclusions: steps under certain schemes etc 554F Exclusions: commercial transactions 554G Exclusions: transactions under employee benefit packages 554H Exclusions: earmarking of deferred remuneration 554I Exclusions: introduction to sections 554J to 554M 554J Exclusions: earmarking for employee share schemes (1) 554K Exclusions: earmarking for employee share schemes (2) 554L Exclusions: earmarking for employee share schemes (3) 554M Exclusions: earmarking for employee share schemes (4) 554N Exclusions: other cases involving employment-related securities etc 554O Exclusions: employee car ownership schemes 554OA Exclusions: transfer of employment-related loans 554P Exclusions: employment income exemptions under Part 4 554Q Exclusions: income arising from earmarked sum or asset 554R Exclusions: acquisitions out of sums or assets 554RA Exclusions: relevant repayments 554S Exclusions: pension income chargeable under Part 9 etc 554T Exclusions: employee pension contributions 554U Exclusions: pre-6 April 2006 contributions to employer-financed retirement benefit schemes 554V Exclusions: purchases of annuities out of pension scheme rights 554W Exclusions: certain retirement benefits etc 554X Exclusions: transfers between certain foreign pension schemes 554XA Exclusions: payments in respect of a tax liability 554Y Power to exclude other relevant steps 554Z Interpretation: general 554Z1 Interpretation: persons linked with A 554Z2 Value of relevant step to count as employment income 554Z2A Exception to section 554Z2(1): close companies 554Z3 Value of relevant step 554Z4 Residence issues 554Z4A Temporary non-residents 554Z5 Overlap with money or asset subject to earlier tax liability 554Z6 Overlap with certain earnings 554Z7 Exercise price of share options 554Z8 Cases where consideration given for relevant step 554Z9 Remittance basis: A did not meet section 26A requirement 554Z10 Remittance basis: A met section 26A requirement 554Z11 Remittance basis: supplementary 554Z11A Temporary non-residents 554Z11B Earlier income tax liability: application of section 554Z11C 554Z11C Earlier income tax liability: treatment of payments 554Z11D Earlier income tax liability: provisional payments of tax 554Z11E Application for provisional payments to be treated as payment of tax 554Z11F Provisional payments of tax: further provision 554Z11G Earlier income tax liability: supplementary provision 554Z12 Relevant step taken after A's death etc 554Z13 Subsequent income tax liability 554Z14 Relief where earmarking not followed by further relevant step 554Z15 Location of employment duties 554Z16 Application etc 554Z17 Employer etc to be treated as relevant third person etc 554Z18 Earmarking etc 554Z19 Provision of security 554Z20 Valuation of step within section 554Z19 554Z21 Relief for earmarking or security not followed by contribution or relevant benefit 555 Former employee entitled to deduction in calculating net income 556 Deductible payments made outside the time limits allowed 556A Deductible payments made pursuant to tax avoidance arrangements 557 Deductible payments wholly or partly borne by the former employer etc. 558 Meaning of “deductible payment” 559 Liabilities related to the former employment 560 Meaning of “qualifying insurance contract” 561 Connected contracts 562 Meaning of “former employee” and “employment” 563 Other interpretation 564 Application of this Part to office-holders 565 Structure of Part 9 566 Nature of charge to tax on pension income and relevant definitions 567 Amount charged to tax 567A Cases in which Part 7A has applied to source of pension income 567B Cases where inheritance tax is paid in respect of pension death benefit 568 Person liable for tax 569 United Kingdom pensions 570 “Pension”: interpretation 571 Taxable pension income 572 Person liable for tax 572A Temporary non-residents 573 Foreign pensions 574 “Pension”: interpretation 574A “Pension”: relevant lump sums 575 Taxable pension income 576 Person liable for tax 576A Temporary non-residents 577 United Kingdom social security pensions 578 Taxable pension income 579 Person liable for tax 579A Pensions 579B Taxable pension income 579C Person liable for tax 579CZA Exemption for beneficiaries' income withdrawal in some cases 579CA Temporary non-residents 579CB Refund of overpaid inheritance tax treated as pension 579D Interpretation 590 Annuities 591 Taxable pension income 592 Person liable for tax 593 Unauthorised payments: application of section 583 594 Meaning of “former approved superannuation fund” 595 Annuities 596 Taxable pension income 597 Person liable for tax 598 Income withdrawals 599 Taxable pension income 600 Person liable for tax 601 Unauthorised personal pension payments 602 Taxable pension income 603 Person liable for tax 604 Meaning of “personal pension scheme” and related expressions 605 Annuities 606 Meaning of “retirement annuity contract” 607 Taxable pension income 608 Person liable for tax 609 Annuities for the benefit of dependants 610 Annuities under non-registered occupational pension schemes 611 Annuities in recognition of another’s services 611A Exemptions from sections 609 to 611 612 Taxable pension income: UK annuities 613 Taxable pension income: foreign annuities 614 Person liable for tax 615 Certain overseas government pensions paid in the United Kingdom 616 Taxable pension income 617 Deduction allowed from taxable pension income 618 Person liable for tax 619 The House of Commons Members' Fund 620 Meaning of “House of Commons Members' Fund” 621 Taxable pension income 622 Person liable for tax 623 Return of surplus employee additional voluntary contributions 624 Taxable pension income 625 Person liable for tax 626 Income tax treated as paid 627 Meaning of “grossing up” 628 Interpretation 629 Pre-1973 pensions paid under the Overseas Pensions Act 1973 630 Interpretation 631 Taxable pension income 632 Person liable for tax 633 Voluntary annual payments 634 Taxable pension income: UK voluntary annual payments 635 Taxable pension income: foreign voluntary annual payments 636 Person liable for tax 636A Exemptions and liabilities for certain lump sums under registered pension schemes 636AA Taxable lump sum death benefits 636B Trivial commutation and winding-up lump sums 636C Trivial commutation and winding-up lump sum death benefits 637 Introduction 637A Pension commencement lump sums 637B Pension commencement excess lump sums 637C Serious ill-health lump sums 637D Uncrystallised funds pension lump sums 637E Short service refund lump sum 637F Refund of excess contributions lump sums 637G Trivial commutation lump sums and winding-up lump sums 637H Defined benefits lump sum death benefits 637I Pension protection lump sum death benefits 637J Uncrystallised funds lump sum death benefits 637K Annuity protection lump sum death benefits 637L Drawdown pension fund lump sum death benefits 637M Flexi-access drawdown lump sum death benefits 637N Trivial commutation lump sum death benefits 637P Individual’s lump sum allowance 637Q Availability of individual’s lump sum allowance 637R Individual’s lump sum and death benefit allowance 637S Availability of individual’s lump sum and death benefit allowance 637T Availability of individual’s lump sum and death benefit allowance where multiple lump sum death benefits paid 637U Availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes 638 Awards for bravery 639 Pensions in respect of death due to military or war service 640 Exemption under section 639 where income withheld 640A Lump sums provided under armed forces early departure scheme 641 Wounds and disability pensions 642 Compensation for National-Socialist persecution 642A Netherlands Benefit Act for Victims of Persecution 1940-1945 643 Malawi, Trinidad and Tobago and Zambia government pensions 644 Pensions payable where employment ceased due to disablement 644A Health and employment insurance payments 645 Social security pensions: increases in respect of children 646 Former miners etc: coal and allowances in lieu of coal 646A Foreign pensions of consular employees 646B Registered schemes: beneficiaries' annuities from unused funds 646C Registered schemes: beneficiaries' annuities from drawdown funds 646D Non-registered schemes: beneficiaries' annuities from unused funds 646E Non-registered schemes: beneficiaries' annuities from drawdown funds 646F Interpretation of sections 646B to 646E 647 Introduction and meaning of “foreign residence condition” etc. 648 The Central African Pension Fund 649 Commonwealth government pensions 650 Oversea Superannuation Scheme 651 Overseas Pensions Act 1973 652 Overseas Service Act 1958 653 Overseas Service Pensions Fund 654 The Pensions (India, Pakistan and Burma) Act 1955 655 Structure of Part 10 656 Nature of charge to tax on social security income 657 Meaning of “social security income”, “taxable benefits” etc. 658 Amount charged to tax 659 Person liable for tax 660 Taxable benefits: UK benefits – Table A 661 Taxable social security income 662 Person liable for tax 663 Long-term incapacity benefit: previous entitlement to invalidity benefit 664 Short-term incapacity benefit not payable at the higher rate 665 Exempt unless payable to a person involved in a trade dispute 666 Child maintenance bonus 667 Amounts in excess of taxable maximum 668 Taxable maximum 669 Interpretation 670 Child maintenance bonus 671 Amounts in excess of taxable maximum 672 Taxable maximum: general 673 Taxable maximum: income-based jobseeker’s allowance 674 Taxable maximum: contribution-based jobseeker’s allowance 675 Interpretation 676 Increases in respect of children 677 UK social security benefits wholly exempt from tax: Table B 678 Taxable benefits: foreign benefits 679 Taxable social security income 680 Person liable for tax 681 Taxable and other foreign benefits: exemptions 681A Foreign benefits of consular employees 681B High income child benefit charge 681C The amount of the charge 681D Extension of charge in cases where child not living with claimant 681E Special cases 681F Alteration of income limit etc by Treasury order 681G Meaning of “partner” 681H Other interpretation provisions 681I Winter fuel payment charge 681J Alteration of income limit by Treasury order 682 Scope of this Part 683 PAYE income 684 PAYE regulations 685 Tax tables 686 Meaning of “payment” 687 Payments by intermediary 687A Payment of employment income under Part 7A 688 Agency workers 688A Managed service companies: recovery from other persons 688AA Workers' services provided through intermediaries: recovery of PAYE 688AB Workers’ providing services through intermediaries etc: cases where taxes already paid 688B Travel expenses of workers providing services through intermediaries: recovery of unpaid tax 689 Employee of non-UK employer 689A Oil and gas workers on the continental shelf 690 Internationally mobile employees 690A Employer notification for internationally mobile employees 690B Direction by HMRC in relation to internationally mobile employees 690C Employees who were internationally mobile etc. before 2025-26 690D Employer notification for qualifying new residents or treaty non-residents 690E Direction by HMRC in relation to qualifying new residents or treaty non-residents 691 Mobile UK workforce 692 Organised arrangements for sharing tips 693 Cash vouchers 694 Non-cash vouchers 695 Credit-tokens 695A Employment income under Part 7A 696 Readily convertible assets 697 Enhancing the value of an asset 698 PAYE: special charges on employment-related securities 699 PAYE: conversion of shares 700 PAYE: gains from securities options 700A Employment-related securities etc: internationally mobile employees 701 Meaning of “asset” 702 Meaning of “readily convertible asset” 703 Introduction 704 Sums payable by employers under agreements 705 Approximations allowed in calculations 706 Exclusion of general earnings from income etc. 707 Interpretation of this Chapter 707A Provision of additional information to His Majesty’s Revenue and Customs 708 PAYE repayments 709 Additional provision for certain assessments 710 Notional payments: accounting for tax 711 Right to make a return 712 Interpretation of this Part 713 Donations to charity: payroll deduction scheme 714 Meaning of “donations” 715 Approval of schemes: regulation by Treasury 716 Alteration of amounts by Treasury order 716A Priority rule for dividends etc. of UK resident companies etc. 716B Employment intermediaries to keep, preserve and provide information etc 717 Orders and regulations made by Treasury or Commissioners 718 Connected persons 719 Meaning of “control” 720 Meaning of “ an officer of Revenue and Customs ” etc. 721 Other definitions 722 Consequential amendments 723 Commencement and transitional provisions and savings 724 Repeals and revocations 725 Citation SCHEDULE 1 Abbreviations and defined expressions SCHEDULE 2 ... share incentive plans SCHEDULE 3 ... SAYE option schemes SCHEDULE 4 ... CSOP schemes SCHEDULE 5 Enterprise management incentives SCHEDULE 6 Consequential Amendments SCHEDULE 7 Transitionals and savings SCHEDULE 8 Repeals and revocations
What to do with it
As published
189 Exception where double charge
(1) Section 188 (loan released or written off: amount treated as earnings) does not apply if, by virtue of any other provision of the Income Tax Acts, the amount released or written off—
(a) is employment income of the employee, or
(b) is or is treated as income of the employee (or of the employee as a borrower) which is not employment income and upon which that person is liable to pay income tax.
This is subject to subsections (2) and (3).
(2) If, as a result of subsection (1), Chapter 3 of Part 6 (payments and benefits on termination of employment etc.) would be the only provision by virtue of which the amount released or written off would be income of the employee—
(a) section 188 does apply, and
(b) accordingly Chapter 3 of Part 6 does not apply.
(3) If—
(a) an amount is treated as the employee’s income under section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement) in respect of a capital sum paid in relation to the release or writing-off of the loan, and
(b) the amount released or written off exceeds the amount so treated as income,
section 188 does apply but only the amount of the excess is to be treated as earnings from the employment for the tax year in question under that section.
Your wording
Your change, as a redline
189 Exception where double charge
(1) Section 188 (loan released or written off: amount treated as earnings) does not apply if, by virtue of any other provision of the Income Tax Acts, the amount released or written off—
(a) is employment income of the employee, or
(b) is or is treated as income of the employee (or of the employee as a borrower) which is not employment income and upon which that person is liable to pay income tax.
This is subject to subsections (2) and (3).
(2) If, as a result of subsection (1), Chapter 3 of Part 6 (payments and benefits on termination of employment etc.) would be the only provision by virtue of which the amount released or written off would be income of the employee—
(a) section 188 does apply, and
(b) accordingly Chapter 3 of Part 6 does not apply.
(3) If—
(a) an amount is treated as the employee’s income under section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement) in respect of a capital sum paid in relation to the release or writing-off of the loan, and
(b) the amount released or written off exceeds the amount so treated as income,
section 188 does apply but only the amount of the excess is to be treated as earnings from the employment for the tax year in question under that section.
A proposal here is not law. Support on Solon is evidence that people want the change; the official route says what it takes to make it law.